New Delhi, Aug 2026 : The government has approved the Reserve Bank of India’s proposal to introduce one billion polymer banknotes each in the Rs 10 and Rs 20 denominations for field trials, Finance Minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday.
In a written reply to the Upper House, Sitharaman said the proposal was submitted by the RBI to the government based on a recommendation from its central board under Section 25 of the Reserve Bank of India Act, 1934.
The proposal also provides for the regular issuance of polymer banknotes in the two denominations if the field trials prove successful. According to the Finance Minister, the polymer notes would be introduced alongside existing paper substrate-based currency notes.
“The proposal has been approved by the government. As per the RBI, these polymer banknotes are proposed to be issued along with paper substrate-based banknotes,” Sitharaman said.
She added that the RBI has informed the government that the procurement process is currently at an initial stage. As a result, the exact timeline for introducing the polymer notes and the expenditure involved cannot yet be determined.
The move marks an important step towards testing an alternative banknote material in India. Polymer currency is generally considered more durable than conventional paper-based notes and can potentially withstand greater wear and tear.
Earlier this month, RBI Governor Sanjay Malhotra said the central bank was targeting the launch of polymer currency notes at the beginning of the next financial year.
Speaking at the post-Monetary Policy Committee media briefing in response to an IANS query, Malhotra said the pilot programme for polymer banknotes was still underway.
“There is still a pilot going on for polymer notes,” the RBI Governor said, adding that the currency would be thoroughly tested before being introduced into circulation.
The RBI will assess the results of the field trials before taking a final decision on wider circulation. Malhotra has indicated that the central bank is targeting the broader circulation of polymer notes by FY28, subject to the outcome of the testing and procurement process.
